Concerns Raised over IRS’s Readiness for New Tax Law

The National Society of Accountants (NSA) and the National Treasury Employees Union (NTEU) have both expressed concerns over the IRS’s ability to implement the Tax Cuts and Jobs Act (P.L. 115-97). The NSA cautioned that the proposed fiscal year (FY) 2019 IRS budget will fall short of what is needed. According to the NTEU, adding $400 million to the IRS’s budget would enable the Service to hire 1,600 more employees.

2019 IRS Budget

President Trump unveiled his FY 2019 funding proposal for the IRS on February 12. The president’s budget calls for $ 11.1 billion in base funding for FY 2019, but proposes $15 billion to enforce tax collection over a span of 10 years. The Service received $11.2 billion in base funding in 2017.

NSA

NSA Executive Vice President John Ams discussed IRS funding on Federal News Radio on February 20. “The IRS has been asked to do more with less,” Ams said. Moreover, the IRS has to quickly implement the new tax law.

“There really is no guidance yet on the new tax law,” Ams said. “Without guidance, we’re all guessing what effect some of these provisions will have.”

Ams highlighted some of the business changes. “There were a lot of changes on the corporate side,” Ams said. “No one really knows what the regs will look like.” Last week, the NSA reported that IRS Acting Commissioner David Kautter said Code Sec. 199A guidance will be posted this summer.

Return preparers are getting up to speed about the new tax law, Ams said. “Your preparer may tell you that they are in the process of educating themselves about the new law because the law was signed so late in 2017.” Likewise, software companies need time to reprogram their systems.

Ams also discussed customer service. The IRS has predicted that only 60 percent of calls from taxpayers will be answered this filing season. “Outside of tax season your odds of getting through to the IRS are even worse,” Ams said.

NTEU

The NTEU also expressed alarm at the IRS’s state of readiness for the new tax law. NTEU President Tony Reardon said in a blog post that if Congress gave the IRS $400 million in additional funding, the IRS could hire 1,600 more full-time employees, including 1,000 to answer taxpayer questions. The NTEU represents IRS employees.

“The importance of providing the IRS with additional funding to implement the tax law cannot be overstated,” Reardon said. “Forcing the IRS to reallocate already limited resources from core taxpayer service and enforcement activities to implement the new tax law would further diminish its ability to carry out those activities.”

“Without sufficient staffing to effectively enforce the law to ensure compliance with tax responsibilities and combat fraud, our voluntary tax compliance system is at risk,” Reardon said.